Because politicians have turned Social Security into a “Ponzi scheme,” Republican congressional candidate Eric Brakey said that “maybe we should give young people the opportunity to opt out and save for their own retirements.”

Adrienne Bennett, from left, Eric Brakey and Dale Crafts. File photos

The former state senator from Auburn said during a campaign debate that Social Security is “going to be insolvent within the next decade if nothing is done.”

One of his two opponents in Maine’s 2nd District Republican primary on July 14, 41-year-old Adrienne Bennett of Bangor, said she is young enough to be counted among “one of the first generations that probably won’t see Social Security.”

Brakey, 31, noted, “I don’t know anyone under the age of 35 who thinks Social Security is going to be there for them.”

According to the Social Security Administration’s most recent annual report, however, the situation appears far less dire.

The report says that without changes to the program, there will not be enough money to maintain current expenditure levels after 2035 — but that’s not the same thing as bankruptcy or insolvency.

The agency said it will have enough money without any changes to cover 80% of scheduled benefits after 2035, with the rate gradually declining to 75% in 2093. Even those reductions could be minimized or eliminated if Congress takes steps to change the agency’s financing.

Social Security is different than a Ponzi scheme, named for a grifter named Charles Ponzi in the 1920s. A Ponzi scheme is a fraudulent enterprise that pays initial investors with money from subsequent ones to make it look like a great deal — and then cheats all the folks who put in money too late to earn anything on it.

The reasons the Social Security fund is going to run short, the agency reported, are a declining birth rate during the last half century thereby reducing the number of people adding to the system, longer lifespans, and Baby Boomers hitting their retirement years.

Politicians have not changed the fundamental nature of Social Security since its beginnings during The Great Depression of the 1930s. They have, however, raised the benefit levels as a response to inflation, increased the taxes paid by workers and employers that help finance the system, and moved the expected retirement age to 67 for those born in 1960 or later.

Social Security administrators say the looming shortfall can be erased by increasing payroll taxes, slowing the growth in benefits, adding new revenue or investing money in private securities instead of simply lending it to the federal government.

If, however, younger workers ceased paying in, as suggested by Brakey, the situation could get worse because the agency would have far less money to pay out to current retirees than it expects, experts say.

Bennett and the other contender in the race, Dale Crafts of Lisbon, said the solution is for the economy to grow so that everyone, including the government, has more cash.

Crafts, 61, said one problem is that Social Security is “not getting a return on that money.”

U.S. Labor Secretary Frances Perkins, who lived in Newcastle for many years and was a driving force behind Social Security, pictured before a House hearing on the idea in 1935. Library of Congress photo

He said part of a “solid, solid plan” that needs to be figured out to address the issues with Social Security is to make sure its funds are “invested properly and growing.”

Bennett said the government also needs to make sure people have more opportunities to invest for themselves in 401(k) plans, private retirement accounts commonly used by workers through their employer, to save for retirement.

All three of the candidates in the race — who are vying for the chance to challenge U.S. Rep. Jared Golden, a first-term Democrat, in the Nov. 3 general election — said the nation has to keep its promises to senior citizens and those nearing retirement.

They also agree the government needs to stop spending so much, a step that would help ensure Social Security’s possible future deficits don’t create as serious an overall fiscal problem.

“I’d look at some of the trillion-dollar wars that are putting America last,” Brakey said.

“We need to make some tough decisions,” Bennett said.